Operated by Ports and Maritime Affairs (PMA) at the Ministry of Transportation and Telecommunication, Bahrain Logistics Zone (BLZ) was launched in the year 2008 and is close to the biggest port of Bahrain, Khalifa Bin Salman Port (KBSP). The Logistics Zone offers local, regional, and international companies a base to operate in a bonded area and take advantage of catering the Northern Gulf and GCC markets. The activities under the BLZ includes component assembly, labeling, packaging, and re-packaging and mixing, weighing and filling, kitting and palletizing, and testing and repair. These and many other amenities make BLZ an ideal place for company registration in Bahrain for supply chain firms.
Benefits of Company Incorporation in BLZ
- 100% foreign ownership is allowed
- Multimodal access by land, sea, and air
- Zero custom duties
- Minimum capital requirement
- Flexible plot options with a range of plot sizes starting from 4000 m² onwards
- 0% corporate and personal income tax
- Access to government financial and training support for local employment
- Availability of skilled, well-educated, and bi-lingual local workforce in Bahrain at all levels
- Basic services such as facilities management and special waste management
Types of Businesses Allowed in Bahrain
The Bahrain Free Trade Zone allows only a few types of businesses to be set up, with the aim to extend high performing and long-term sustainable operations. They are:
- Third Party Logistics (TPL) services
- General and specialized storage and distribution activities for export and re-export purposes
- Value-added logistics services such as- assembly, cosmetics weighing, mixing, filling, packaging and repackaging, de-consolidation/consolidation, kitting, palletizing, labeling for distribution, testing and repair, and other value-added-logistics activities
Procedure for Setting Up a Business in Bahrain
The process of business setup in Bahrain free zone is as simple as it gets. There are three important steps that an investor must follow that will grant them an approval from BLZ selection committee for incorporating a company. The three steps are as follows:
- There are certain eligibility criteria for business setup in Bahrain. Review the eligibility and selection criteria to know if your business meets the same
- Submit the application form and all the supporting documents to the authorities of BLZ
- Allow two weeks for a response from the BLZ Selection Committee
Let us go through the above steps one-by-one.
Step 1 - Eligibility
As a part of PMA’s (Port and Maritime Authority) vision to be a mechanism for economic development in Bahrain, the BLZ has been set up as a pioneering landmark for logistics development with the overall objectives of creating adequate and high value-added employment, promoting private sector involvement, and creating direct and foreign direct investments for Bahrain.
Each company that applies to the BLZ authorities for setting up a company is evaluated based on its ability to meet the following three tiers of selection criteria.
This criterion is given 30% weightage and the applicants are evaluated based on their probable company’s ability to support Bahrain in the economic development through:
- Leveraging Bahrain as the business hub for all the operations
- Creating employment and knowledge transfer opportunities
- Value added operations in the zone
- Promoting Foreign Direct Investment
- Innovating business concept and operations
This criterion also is given weightage of 30% and the applicants are evaluated based on their ability to support Bahrain Logistics free zone objectives through:
- Leveraging the port facilities and customs free procedures
- Operations mostly focused on export and re-export
- Operations that include permitted and focus activities in the zone
- Availability of land to match the utility capacity
- Compliance with safety, health and environment standards
40% weightage under the financial criterion is given to the applicants that prove their ability to meet minimum business sustainability standards through:
- Experience and capabilities
- Financial health
- Legal fulfilment
Step 2 - Application Process
Following are the guidelines all the applicants must adhere to while applying for company formation in BLZ.
The applications will be accepted every business day (Sunday-Thursday). The completed application must be packed with corresponding attachments and should be submitted via mail.
2. Evaluation process
To ensure that the application meets all the objectives as mentioned in the 3 criteria, a comprehensive review of all the applications are done by BLZ selection committee. Upon completion of the application evaluation process, applicants will be informed of the decision (average decision time = 2 weeks).
Step 3 - Response
An official letter communicating the informed decision made by the company will be sent to the applicant. The decision is either accepted, waitlisted, or rejected.
The accepted businesses further move on to have discussions with PMA about locations and lease agreement negotiation.
Under this, the companies may be accepted if negotiations with the other accepted companies fail and space becomes available.
Companies under this category are not successful in obtaining space at the Bahrain Logistics Zone.
Why Bahrain Logistics Zone?
The logistics sector in Bahrain has already attracted a number of leading international companies to establish their headquarters in Bahrain in order to access the neighboring GCC countries. Over the coming years, the government of Bahrain has plans of investing in key infrastructural projects like transport, housing, manufacture, healthcare and education, and further development is expected across a range of sectors, including the logistics sector. Bahrain has many feats to overcome in the near future but if it the past is any kind of precedent; it will continue to thrive as an impressive little economy and investor market.
If you are looking for incorporating a business in Bahrain, we at Business Setup Worldwide will guide you through the process and make it easier for you to get yourself settled in the market. Contact us today for any queries related to business formation, registration, accounting and bookkeeping, and company secretarial services in Bahrain.